In April, Dan Kugler, Snap-on Inc.'s assistant treasurer and risk manager, renewed the company's directors and officers liability insurance policy and found the experience a pleasant walk in the park. Despite sobering reports that D&O insurers are potentially on the hook for billions of dollars in losses related to the subprime mortgage market meltdown, Kugler got a free pass.

Actually, the renewal was even better than a free pass since Kugler wrung moderately lower premiums from his D&O insurers than he did last year. "I was also able to favorably adjust the coverage conditions and policy language," says Kugler at the Kenosha, Wis.-headquarters of Snap-on, a maker and distributor of tools and diagnostic equipment with $2.5 billion in annual revenue. "Then again, we have no exposure to subprime."

There's the rub. While most classes of business can expect soft conditions in the D&O market to continue this year, companies in the financial institutions sector, real estate development, home building and other businesses even tangentially involved in housing and finance may be in for a beating. D&O premiums for these businesses are up from 15% to 400%, according to insurance broker Marsh Inc. On the bright side, "this isn't trickling down to affect other companies buying D&O," says Lou Ann Layton, a Marsh managing director.